IBC: SEC Halts Web-Based Scheme Defrauding Deaf Investors
FOR IMMEDIATE RELEASE
2010-184
Washington, D.C., Oct. 7, 2010 — The Securities and Exchange Commission has
charged an Internet-based investment company with securities fraud for
soliciting several million dollars from U.S. investors and promising them
guaranteed returns of 1.2 percent per day while in reality siphoning the
funds into foreign bank accounts and not paying a single penny back to
investors.
The SEC has obtained an emergency court order freezing the assets of Imperia
Invest IBC, which allegedly raised more than $7 million from approximately
14,000 investors worldwide. More than half the funds were collected from
U.S. investors who are members of the Deaf community. Imperia offered the
investment opportunity through its website by touting such lucrative
examples as a $50 investment turning into a $134,000 return in six months.
Imperia’s website stated that investors could only access their profits by
purchasing a Visa debit card from Imperia for a few hundred dollars.
However, Imperia has no relationship with Visa and was using the Visa name
without authorization. On its website, Imperia has listed fake business
addresses in both the Bahamas and Vanuatu.
“Imperia’s operators took proactive steps to conceal their identity by using
an anonymous browser to host its website, communicating with all investors
via e-mail, and taking their payments through off-shore PayPal-style bank
accounts,” said Kenneth D. Israel, Director of the SEC’s Salt Lake Regional
Office. “Investors were promised eye-popping amounts of money in return for
a simple $50 or $100 investment, and Imperia has made numerous excuses on
its website about why these returns haven’t been paid.”
The SEC’s complaint filed in U.S. District Court in Utah on October 6
alleges that Imperia is defrauding investors by soliciting funds via the
Internet to purchase Traded Endowment Policies (TEP) — the British term for
viatical settlements. A TEP or viatical settlement involves the sale of an
insurance policy by the policy owner before the policy matures, and policies
are sold at a discount from face value in an amount greater than the current
cash surrender value. Imperia’s website stated that an initial $50
investment would allow the investor to obtain an $80,000 loan from an
unnamed foreign bank that would be used by Imperia to purchase a TEP.
Imperia would then trade the TEPs and pay the investor a guaranteed return
of 1.2 percent per day. While Imperia contends that its experience with
financial derivatives and bank securities allows it to offer trading in TEPs
to the mass market, no TEP purchases or trading appear to be taking place.
According to the SEC’s complaint, the majority of investor funds were paid
to Imperia through three PayPal-type entities located in Costa Rica, Panama,
and the British Virgin Islands. Once the funds have been received from
investors, Imperia apparently funnels these amounts and additional investor
funds to bank accounts located in Cyprus and New Zealand. Meanwhile,
investors are not receiving any returns. For example, one investor who
invested $150 with Imperia received account statements from Imperia showing
he had earned more than $36 million within a two-year time frame. Another
individual who invested $500 in July 2007 received statements showing his
account was worth nearly $44 million as of May 2010. Meanwhile, Imperia has
made a range of excuses on its website about why investors have not received
the astronomical returns they were promised. It initially claimed it could
start paying investors only when it had at least 10,000 investors — a number
that already has been significantly exceeded. Then Imperia claimed it
experienced computer server problems during its “relocation” from the
Bahamas to Vanuatu. Other purported reasons for delays in paying out
investment proceeds have been the need for additional time to verify the
identities of investors, and compromise of Imperia’s computer system by
hackers.
The emergency court order obtained by the SEC late yesterday on an ex parte
basis freezes Imperia’s assets and, among other things, grants expedited
discovery and prohibits Imperia from destroying evidence. In addition to the
emergency relief for investors, the SEC is seeking an injunction against
future violations of the antifraud and securities registration provisions of
the federal securities laws, disgorgement of ill-gotten gains with
prejudgment interest, and financial penalties.
This matter was investigated by Jennifer Moore, Scott Frost and Matthew
Himes of the SEC’s Salt Lake Regional Office, and the litigation will be led
by Daniel Wadley. The SEC appreciates the assistance of the State of Maine
Office of Securities, the Securities Commission of the Bahamas, the Vanuatu
Financial Services Commission, and the Cyprus Securities and Exchange
Commission.
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For more information about this enforcement action, contact:
Kenneth D. Israel
Regional Director, SEC’s Salt Lake Regional Office
(801) 524-5796
Karen Martinez
Assistant Director, SEC’s Salt Lake Regional Office
(801) 524-5796